Boston, MA · Member since 2014 · 152 posts · 63 votes
Hello BPers...
My name is John Elmenhe, I'm 15 years old and I'm going to begin investing in real estate the day I hit 18 years old by trying to wholesale properties. I'm going to begin working soon and I'm NOT going to spend a DIME! It's all going into my savings account or a CD. RE investing is everything that I've wanted and more, so I'm not going to college.
I've been reading RE/business books and taking online courses in creative RE investing. One piece of advice that I keep on getting over and over again is that RE investing MUST be treated like a serious business, and not some hobby you partake in on a Saturday.
I feel like I should lease out an office space in a commercial building, so that I am physically removed from any sort of leisurely environment. Is this necessary? I mean I feel like my home isn't a really professional environment. Also, does anyone have advice on what necessarily constitutes a professional RE business?
Should I form a legal entity? Get an office with office supplies? Dress up in a formal way?
Your thoughts?
Hello BPers...
My name is John Elmenhe, I'm 15 years old and I'm going to begin investing in real estate the day I hit 18 years old by trying to wholesale properties. I'm going to begin working soon and I'm NOT going to spend a DIME! It's all going into my savings account or a CD. RE investing is everything that I've wanted and more, so I'm not going to college. I've been reading RE/business books and taking online courses in creative RE investing. One piece of advice that I keep on getting over and over again is that RE investing MUST be treated like a serious business, and not some hobby you partake in on a Saturday.
I feel like I should lease out an office space in a commercial building, so that I am physically removed from any sort of leisurely environment. Is this necessary? I mean I feel like my home isn't a really professional environment. Also, does anyone have advice on what necessarily constitutes a professional RE business?
Should I form a legal entity? Get an office with office supplies? Dress up in a formal way?
Your thoughts?
You are the same age as two of my grandsons. So, I am going to give you the EXACT same advice I would give either of them if they came to me with your questions.
First and foremost, you are 15, you are a kid, you will never, ever be a kid again. Enjoy it while it lasts.
Second, rethink the college thing. There are a lot of lower cost good schools out there that could help you tremendously with your real estate investing career and give you a fallback to make ends meet while you are becoming the next Donald Trump. You can do real estate and college at the same time - I did.
Third, forget getting an outside office until you absolutely need an outside office. You can setup a space in your home, even it if is just a corner of your bedroom to start. As for distractions, you will always have to deal with those. Setting up an outside office is not going to eliminate those. It takes discipline and focus and everyone deals with that differently.
Fourth, yes, treat it like a business. What that means is everything is contained. Your wholesaling will need its own bank accounts, email addresses, etc. You have to treat the funds in the business as the businesses, not yours unless and until you actually pay yourself and the tax man. You can't have your business buy that shiny new car or whatever, and write it off. It doesn't mean you need to form a company. In fact, you should NOT form a company at this point. When you start wholesaling, focus on actually doing deals. Everything else will fall into place if you do. If you don't do deals, the perfect company, website, marketing message and everything else will all be useless to you.
Fifth, know that the actions you take now will have a lasting impact on your future. You are miles ahead of most of your friends in your thinking. But, as I said earlier, you are kid and never will be again. The last thing you want is 70 years from now to look back and think, wow, I wish I really had spent more time with my friends when I was a kid.
Sixth, don't ever let anyone kill your enthusiasm. You have the whole world in front of you and at this point in your life your choices and possibilities are infinite.
Seventh, read every business book you can get your hands on. Read "The Millionaire Next Door" and "The Millionaire Mind." Avoid the guru books out there, they will get you into trouble. One book you should read is "Dig Your Well Before You Are Thirsty." Also, anything by Larry Winget.
Eighth, if at all possible, learn to play golf. You will thank me in about 10 years. You will probably curse me until then.
Lastly, always look to expand your network of friends and acquaintances. Opportunities will open for you in unexpected and unpredictable ways through your friends, neighbors and acquaintances. The more of them you have the more opportunities you will see.
But, do always remember, you will never be 15 again. Spend at least a little time doing the things kids can do but we adults can't without accusatory glances thrown our way.
Wholesaler · Arlington, TX · Member since 2013 · 59 posts · 29 votes
12y
Treating Real Estate investing as a business means different things to different people. The obvious one for me is that you have to plan. A hobby is something you can do on the side and whether or not it succeeds isn't of import, another way of saying to half*** it.
Treating something like a business is through your actions rather than your words. If you've got the drive to succeed, go out and meet real estate investors in your area. Start studying your local market, start studying for your Re license, devour every book, blog, or podcast you can get your hands on. Most importantly is your plan. Where do you want to go, why do you want to get there, how will you get there are some important questions to ask yourself. You have to be persistent, consistent, and disciplined in what you do.
Be a do-er rather than a talker. A business plan is also very important as well. Your livelihood depends on a business but a hobby is for fun without the risks.
Anyways, you have come to the right place at bigger pockets especially at such a young age. Best of luck to you and your investing future.
House Flipper · East Stroudsburg, PA · Member since 2013 · 1k+ posts · 205 votes
12y
Welcome to the BP family. My compliments for your drive and your ambition. It appears you have three years to go before you take the step. I would suggest that you work out of your home as to not incur any unnecessary overhead, acquire your first property(s) and see where it takes you. There are many speciality fields that you should explore at this stage of your career and identify with one that you should start with and branch off from there. I would attend some local real estate groups and absorb what is going on. Visit the podcasts that are offered by Bigger Pockets which should assist you in the direction you wish to pursue. When your in the industry to make money, its' not a hobby. Again welcome aboard.
Boston, MA · Member since 2014 · 152 posts · 63 votes
12y
Thanks @Henry Nguyen for the post. What exactly would a RE business plan entail? A niche? Exit strategies? How I'm going to fund my deals? What type of deal? Do you have a template that you use for your plan? Legal entity? Do you think that I should attend my local REIA club meeting?
Investor/Realtor · Hoover, AL · Member since 2010 · 1k+ posts · 459 votes
12y
@John E. ...Just thinking about real estate at such a young age is Awesomet!! When starting out always keep cost down. You don't have to look a certain part..RE is about ACTION!!..Sounds like you're taking action by reading and learning the business...keep up the good work!
I feel like I should lease out an office space in a commercial building, so that I am physically removed from any sort of leisurely environment. Is this necessary? I mean I feel like my home isn't a really professional environment.
I work from home both in my 9-5 corporate job and my real estate business. I have an office set up in a spare bedroom and it is all business. If your idea of a "home office" is a laptop on the couch in front of the TV, then you'll likely be wasting a lot of time being unproductive.
Don't incur unnecessary expenses up front. As you build the business and scale up, you should start considering spending money where it is most effective. Depending on the type of business you do, there may never be a need for an office. Commercial space here in KY runs $20/sf/year and up. So if you want a 500 square foot office, you have to be at least $10K in the green per year just to break even if you rent an office vs. working out of your home.
You've definitely come to the right place for learning and should be able to soak up a LOT of knowledge just through this site over the next 3 years. My recommendation would be to spend money on education (mainly books, not seminars) and networking. Spending money on an office is counter-productive unless you have a high volume of business that requires an office to close deals. I've never heard of anybody needing an office to do wholesale deals.
You also mentioned not spending a dime - keep in mind that the top two types of investments you can make are time and money. The less money you invest, the more time you invest and vise versa. When starting out, most people invest a lot of time and little money (because they have none). In order to grow and be highly successful, you'll need to learn how to effectively spend money instead of time.
You might try doing a search of the site for "young investors" as we have had several join, and some are under 18.
Though a formal education isn't required, I hope you are at least finishing high school. As for college classes, don't rule it out. Maybe you can take them online, and work towards a degree, in business, finance, project management, or ? I guarantee you won't regret having an education, it allows you far more options. When you are borrowing money and doing a business summary, it doesn't hurt to have some college under your belt. ;)
As for business space. We work from our house, though evenutally we will be opening an office (when it's necessary) We relocated to a new area, and weren't sure exactly which city we wanted to settle in, or where the bulk of our work would be done, therefore; we haven't rented an office yet. However; we are still able to handle our development business, from home, though the paperwork is getting to a point where we will be renting space soon.
I'd suggest that rather than work from home and be alone, you find a contractor or rehabber that you can work with to learn their side of the business. The more you know about real estate, and construction, the better understanding you will get of the market, values, expenses, etc. All of that helps build a foundation.
If you're going to work at home, learning discipline; and not playing games, watching tv, etc. is a very important part of the process. That discipline will help you in other areas of your business. Set yourself a regular schedule that is your work day, school classes, exercise and leisure time. It takes 21 days to build a habit, so consistently stick to your schedule for that period of time, and see if it helps. But, you're a kid first, so don't over do it on the work, maybe 4 hrs. a day.
I hope this helps! If you have any questions, just ask. Welcome to BP!
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
John, welcome. Your first goal is your education, getting to and finishing college! Part time, you can follow your passion of RE. As mentioned, you need to investigate other aspects of the industry. Begin by studying RE basics, it's not exciting, but you need to understand what kind of deeds are used, what a contract is, legal aspects, how to value a property and what is common in your area. Stay away from gurus, glad to hear you won't be spending money on materials too.
To answer your business question, make money! If the majority of you income is from some venture, then you can be seen as being in the business. No, you don't need an office, clothes to dress up or anything else as much as just having your earnings come from an activity. Best of luck, study well, first things first! :)
Boston, MA · Member since 2014 · 152 posts · 63 votes
12y
@John Moore What is your niche? And why do you invest in it? Also, do you think I could attend a REIA meeting at my age? Would it be seen as abnormal? Your thoughts on that?
Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
12y
@John E. - To answer your question in the title of your post: The first time that you lose money on a deal, it will no longer be a hobby. I can promise you that.
Hello BPers...
My name is John Elmenhe, I'm 15 years old and I'm going to begin investing in real estate the day I hit 18 years old by trying to wholesale properties. I'm going to begin working soon and I'm NOT going to spend a DIME! It's all going into my savings account or a CD. RE investing is everything that I've wanted and more, so I'm not going to college. I've been reading RE/business books and taking online courses in creative RE investing. One piece of advice that I keep on getting over and over again is that RE investing MUST be treated like a serious business, and not some hobby you partake in on a Saturday.
I feel like I should lease out an office space in a commercial building, so that I am physically removed from any sort of leisurely environment. Is this necessary? I mean I feel like my home isn't a really professional environment. Also, does anyone have advice on what necessarily constitutes a professional RE business?
Should I form a legal entity? Get an office with office supplies? Dress up in a formal way?
Your thoughts?
You are the same age as two of my grandsons. So, I am going to give you the EXACT same advice I would give either of them if they came to me with your questions.
First and foremost, you are 15, you are a kid, you will never, ever be a kid again. Enjoy it while it lasts.
Second, rethink the college thing. There are a lot of lower cost good schools out there that could help you tremendously with your real estate investing career and give you a fallback to make ends meet while you are becoming the next Donald Trump. You can do real estate and college at the same time - I did.
Third, forget getting an outside office until you absolutely need an outside office. You can setup a space in your home, even it if is just a corner of your bedroom to start. As for distractions, you will always have to deal with those. Setting up an outside office is not going to eliminate those. It takes discipline and focus and everyone deals with that differently.
Fourth, yes, treat it like a business. What that means is everything is contained. Your wholesaling will need its own bank accounts, email addresses, etc. You have to treat the funds in the business as the businesses, not yours unless and until you actually pay yourself and the tax man. You can't have your business buy that shiny new car or whatever, and write it off. It doesn't mean you need to form a company. In fact, you should NOT form a company at this point. When you start wholesaling, focus on actually doing deals. Everything else will fall into place if you do. If you don't do deals, the perfect company, website, marketing message and everything else will all be useless to you.
Fifth, know that the actions you take now will have a lasting impact on your future. You are miles ahead of most of your friends in your thinking. But, as I said earlier, you are kid and never will be again. The last thing you want is 70 years from now to look back and think, wow, I wish I really had spent more time with my friends when I was a kid.
Sixth, don't ever let anyone kill your enthusiasm. You have the whole world in front of you and at this point in your life your choices and possibilities are infinite.
Seventh, read every business book you can get your hands on. Read "The Millionaire Next Door" and "The Millionaire Mind." Avoid the guru books out there, they will get you into trouble. One book you should read is "Dig Your Well Before You Are Thirsty." Also, anything by Larry Winget.
Eighth, if at all possible, learn to play golf. You will thank me in about 10 years. You will probably curse me until then.
Lastly, always look to expand your network of friends and acquaintances. Opportunities will open for you in unexpected and unpredictable ways through your friends, neighbors and acquaintances. The more of them you have the more opportunities you will see.
But, do always remember, you will never be 15 again. Spend at least a little time doing the things kids can do but we adults can't without accusatory glances thrown our way.
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
12y
John I am 39 now. When I was your age I was thinking at times of doing real estate. Didn't get going with it until many years later.
Your brain doesn't stop fully growing until in your 20's and the last part to develop is the reasoning center.
All the advice about going to college I am torn on. To go to college to "get your education" is a waste in my opinion and here is why. If you do not know WHAT you want to do as a career then you can rack up huge student debt that by the way is NOT able to be eliminated even in a bankruptcy!
You are stuck with a degree that isn't going to bring you much money and a huge debt. That's not a positive way to get started in this world. Now if you have a grant or some other kind of assistance where total cost to go to college is only a few k on your part after 4 years then having a paper to fall back on could be beneficial just in case.
I talk to many people who say they just went with a subject to get a degree to pacify parents or choose something. I do not hear from them " I love this subject so much with a passion that I think of doing nothing else! ". There are cases where high income jobs and obtaining degrees make sense because demand is there to pay off student debts such as doctors, etc.
What doesn't make sense is getting degrees where the market is flooded having you start out at 30k a year with 75,000 in student loans. It just doesn't make any sense.
Drive and constant learning is what will make you have success in this world.
House Flipper · East Stroudsburg, PA · Member since 2013 · 1k+ posts · 205 votes
12y
@John Elmenhe: To answer your questions; I'm a house flipper, I purchase homes, fix them up and sell them retail. This is a full time activity, I invest time and money and focus on making a profit. As far as attending real estate investment clubs at your age, I would think you would add a breath of fresh air. Most participants only wish that they had started their interest in the business at your age. You should be very knowledgable when you elect to enter the business world full time. My niche market is selling rehabbed homes that are in move in condition at below market prices. The market I'm involved in attracts both NY and New Jerey residents who find homes in their area are to expensive; they can get more bang for the buck in my geographic area. I hope I've answered all of your questions.
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
12y
@John E. I love reading posts like this. I wish I was thinking that way at 15. There's all different ways to invest in real estate so it really depends on what your long term goals and objectives are. It also depends on what the market factors are at the time. Real estate markets can shift and change very quickly and what is a good strategy in one market day might not be a good strategy a year from now. You just have to be nimble and light on your feet. My recommendation is to take the next 3 years and learn as much as you can about different investment tactics and then when the time comes, figure out which is best for you. In the meantime, you don't have to wait until you're 18. You might think about being a "bird dog" for someone and find deals for them. This would be a great way to learn the wholesale business. Get started now and be a millionaire by the time you're 25. Something tells me you can do it.
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
12y
@John E. on the subject of getting a college degree, an education is important but there's a lot of ways to get an education. If you want to do this as a business and not a hobby then you need to learn how to run and manage a business. At the very least, I would take some finance classes and understand how money and finance works and be sure to do a lot of reading on the subject. Too many businesses fail because the people operating them don't understand basic accounting and financial principles.
Rental Property Investor · Ann Arbor, MI · Member since 2013 · 55 posts · 4 votes
12y
Find a reasonably priced college and go. The experience is about growth not what job you get the day after graduation. I'd go back to college tomorrow if I could!
Residential Real Estate Agent · Miami, FL · Member since 2013 · 195 posts · 138 votes
12y
Identifying your career aims so early is a great start, but you really should go to college. Keep it cheap. Keep it local to an area that you would like to eventually work in. Attend part time, if necessary. No reason you can't do real estate and college at the same time.
In the end, there is a lot more to life that business, money, or real estate. Your ambition is admirable, but you need to balance it with other positive (and pleasurable) experiences you'll encounter along the way. Going to college is a formative experience for many. And even those that don't "need" it tend to enjoy it.
As much as you think you know now, you'll know a lot more 5 years from now (and even more 5 years after that, etc.). Given your focus, I suggest you tailor the experience to benefit you. Not skip the experience alltogether.
Real Estate Agent · Victoria, MN · Member since 2013 · 56 posts · 29 votes
12y
Not sure what type of real estate your hoping to get into. But at 15 you can start leaning by getting your hands dirty. Meet some people at real estate clubs and offer to work for them for cheap if they teach you along the way. Nothing beats for first hand knowledge. Then in 3 years GO TO SCHOOL. You don't have to put RE on hold. Instead buy your first rental property and have your friends rent from you. Don't underestimate how much a finance degree will help you along the way.
Real Estate Investor · Minneapolis, MN · Member since 2013 · 61 posts · 33 votes
12y
You are awesome little buddy John Elmenhe
You are going to get a lot of mixed reviews about going to college. The two things that I took away from college was 1)discipline and 2)the urge to want to know and learn more. You seem to have mastered these two already. If you can get invested in this as soon as you can, you can probably retire by age 25, and then go back to college because it helps pass the time in your retirement. Lol.
Congrats at starting to think about real estate early in your life. The IRS defines the difference between a business and a hobby this way. If you are really in business then you will make a profit in at least 2 of the last 5 years. If you perpetually lose money, as the IRS defines it you are not in business, but you have a hobby, which is not expected to be a profit making venture. Take horses as an example. If you a horse or two or so and you have some sort of business involving the horses and you never make any money, then that horse venture is a hobby and not a business. But if you are making money, maybe not every year, but at least 2 out of 5 years then you're in a business. And when you are in a business then there are more tax deductions that the IRS will allow versus a hobby.
Boston, MA · Member since 2014 · 152 posts · 63 votes
12y
@Duncan Taylor I totally understand that!!!! The fact of the matter is that my student loan debt would NEVER be discharged in bankruptcy. I mean I could owe a bank a BILLION dollars and even that would be dischargeable. The last thing I want is some lien related to student loan debt. I believe that debt ISN'T a 4 letter word and that student loan debt will eat my alive! The last thing I want to do is WASTE exorbitant amounts of money on something that will provide no return on my investment! It's a piece of paper and that's it. I can enrich myself with knowledge on the internet, with books, and discussing things on a blog such as BP. I have a great social network and I always do my best to expand it. People need to understand that the old paradigms of the past probably won't be applicable in the future. Work hard, save money, allocate money towards a 401(k), and retire at 65, broke, overworked, and in dismay. I just know I'll be right about my choice of not attending years from now. I feel like it's 2007 and everyones telling me to dump my capital into RE. The government is providing such easy financing for college to anyone. Not to mention that it doesn't make sense that prices are rising,! How ? in the information age, formal education is skyrocketing at rates of 5%+ a year...The college bubble will burst!
I would rather show a lender my financial statement that PROVES i'm financially intelligent then a piece of paper that indicates that I can conform to a life of subservience. I understand exactly how our financial system works through fractional reserve lending and a fiat currency that is systematically designed to lose value over time. That's why I'd rather take my capital and invest in physical assets like gold, silver, copper, oil, natural gas, and real estate. Especially RE and silver. I mean the value of the currency will go down, supply and demand will cause real estate prices to go up because of all of the growth the world is experiencing, not to mention that the cost of construction materials will continue to climb. For most of the populace (the sheep), this is a load of crazy talk and they'll go to sleep tonight pondering over who will be voted out on American Idol. LOL! I mean I was born in 1998 and I can just see where this world is going. I'm just going to use my knowledge of how our world works to my advantage.
Andrew Carnegie, Abraham Lincoln, Henry Ford, Steve Jobs, Mark Zuckerberg, Bill Gates, Michael Dell, and Thomas Edison are all individuals that didn't finish post-secondary schooling and ended up being successful because of their own sweat, blood, and tears- not from some colorful cap and gown.
Residential Real Estate Agent · Miami, FL · Member since 2013 · 195 posts · 138 votes
12y
Naming 8 success stories (of unfinished secondary schooling, not even of those not attempting secondary schooling) does not mean much.
Is it possible to succeed without a college degree? Of course. But its more challenging. Sometimes significantly so.
And, in reality, college doesn't HAVE to be expense. If you're anywhere near as intelligent as you propose above, you should have no trouble earning a full ride to some state school near you. And I'm not saying this in a patronizing manner. Seriously, at the age of 15, I wasn't capable of formulating or writing the paragraphs above, and I could have attended several schools for free (but choose an expensive private school, which I don't recommend, as I'm still paying for it over 10 years later, lol).
